August 14, 2022

Egypt Announces Prequalification for Desalination Projects

In light of the Egypt’s plan toward encouraging the participation of the private sector in developing seawater desalination projects (“Projects”), the Sovereign Fund of Egypt (“SFE“) announced the desalination program (“Program”) and the opening of the prequalification process for potential investors that are interested in participating.

Governmental offtakers

It is anticipated that the Projects would involve certain Egyptian stakeholders such as the Ministry of Housing, Utilities and Urban Communities as well as the Suez Canal Economic Zone (“Stakeholers” or “Offtakers“) and the SFE would be the representative of the abovementioned Stakeholders.

Long-term offtake agreement backed with sovereign guarantee

The Egyptian Government will be the Offtaker under long-term water purchase agreements which shall be supported by a sovereign guarantee issued by the Egyptian Ministry of Finance. The expected operation term for each Project ranges from 20 to 30 years.

Project capacities

The Stakeholders are planning to launch Projects with a capacity of 8.85 million m3/day by 2050 and a capacity of 3.35 million m3/day by 2025.

Projects shall be powered by renewable energy. Projects are classified into 4 different categories based on the capacity of the plant as follows:

Qualification CategoriesLot Capacity
Category “A”Up to 1.000.000 m3/day
Category “B”Up to 600.000 m3/day
Category “C”Up to 400.000 m3/day
Category “D”Up to 200.000 m3/day

Prospective applicant

A prospective applicant may be a single company or take the form of a consortium of not more than five (5) members.

Having a local consortium member is encouraged but is not an obligation.

Prequalification criteria

A prospective applicant is required to meet the following qualification criteria and demonstrate sufficient proof thereon:

  1. Experience in project construction and development of desalination projects which have achieved commercial operation after 1 January 2010.
  2. Experience as an operator in the operation and maintenance of a number of desalination projects.
  3. Experience as an operator through developing or operating and maintaining renewable energy projects (solar or wind or hybrid) with the capacity required for the relevant project category.
  4. Experience in successfully raising debt finance, preferably on project finance or limited recourse basis, from financing institutions for at least two (2) infrastructure projects having a raised debt amount not less than the corresponding amount for the relevant project category.
  5. Experience in successfully participating and investing equity contribution for at least two projects with such equity contribution amount not less than the corresponding amount for the relevant project category.

Competitive tender process

After the pre-qualification stage, there shall be a competitive tender process to select the successful bidder to carry out the design, construction, financing, procurement, implementation, operation and maintenance of the Projects.

The specific details of the tendering process, including the deadline and content for submission of bids, will be specified in the Request(s) for Proposal to be issued by the relevant Stakeholder. Partnership is not permitted between qualified applicants without the express written approval of the Prequalification Committee.

The respective successful bidder shall incorporate a Project Company. The SFE will have the right to participate in the Project Company with a share of up to 20% of the issued capital.

Timetable

The deadline for submitting questions and clarification requests regarding the The Request for Qualification (RFQ) is available is 22 August 2022 and the deadline for submitting a Prequalification Application is 22 September 2022.

How can we help?

Riad & Riad can assist interested companies or consortium in:

  • Liaise with the relevant Stakeholders
  • Advise on the relevant laws and regulations and the rules applicable on the prequalification stage and the whole tendering process.
  • Act as the authorized representative in connection with the submission of the Request for Prequalification.
  • Advise on the format and signing of the Prequalification Application and the required forms.

For more information about this opportunity, please contact Dr. Fatma Salah

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